To Bolster Customer Engagement, Take a Page from Retailers’ Playbook

Banks have struggled to earn customers' trust back after the financial crisis, and could learn some tips from other industries.

What can banks learn about customer engagement from other industries? To find out, Accenture studied more than one hundred leading companies across seven industries to identify innovative marketing and distribution practices that we believe banks can look to as a guide for creating deeper connections with their customers.

Banks’ interest in non-banking companies’ best practices is driven by the inescapable fact that, even several years after the financial crisis, they continue struggling to strengthen customer relationships.

To regain that bond, banks should consider adopting these innovations:

• Customer Experience “Unit”. Leading retailers we studied that deployed a unit dedicated to the customer experience have significantly enhanced customer satisfaction and retention. Our research found that banks can similarly benefit. It should include personnel from different functions and be responsible for identifying shortcomings in customer experience, as well as launching, managing and evaluating projects to address such shortcomings.

• Sales Culture. Banks can also learn from retailers’ initiatives that make every employee an ambassador and potential seller of the company’s products by offering rewards and incentives. NH Hotels, a hotel chain operating hundreds of properties in America and Europe, trains employees – from waiters to front-desk officers – to adopt an entrepreneurial sales-driven approach and encourages them to offer special discount promotions to friends and family. Staffers with the strongest sales skills are rewarded. Banks could increase sales, improve branch performance and boost referrals by adopting such a sales-oriented strategy.

• Corporate Citizenship. Of course, building customer trust is neither quick nor easy. One way to do so is with a broad corporate responsibility agenda that aligns with customers’ increasing desire that their service providers focus beyond the bottom line. To succeed, corporate citizenship must be an integral part of the bank’s brand and business goals, and actively involve customers. Unilever’s Sustainable Living Plan – its ten-year commitment to corporate global citizenship – is a great example. The company educates retail customers about sustainable agriculture and the lifecycle impact of products, and works with retailers to deliver innovative in-store programs that engage shoppers.

Barclays embarked on a similar initiative, one of several it is developing, with its 2015 Citizenship Plan, through which it has committed to helping individuals, businesses and economies grow. Barclays has said it plans to support up to 120,000 small- and medium-size enterprises through seminars, tools and training, as well as launch a program in South Africa to share the risk of funding start-up businesses. The bank also has said it intends to scale its apprenticeship and work experience programs to help young unemployed people find work.

• 360-Degree Analytics. The foundation of a customer-centric approach among leading non-banking companies is a deep understanding of customers, enabled by analytics applied to customer data collected from every transaction across channels, including social media.

Procter & Gamble has been a leader for years in using analytics to better understand customers. P&G’s “Consumer Pulse” system – part of a comprehensive data collection process – uses an algorithm to scan, analyze and categorize what consumers are saying about its brand via the Web, blogs and tweets. This data is then combined with other data from suppliers and sales departments and sent to managers, who can see comments related to brands for each geography in near real time. P&G utilizes the data for new product development according to customer preferences identified through analytics and interactions with retail clients.

• Customized Treatment. Luxury fashion retailer Burberry leverages a robust engagement platform to help it provide valuable customer insights to store personnel. The company’s application acts as a real-time hub which gathers and makes customer information accessible to store employees. When customers enter a Burberry store, employees can pull up their profile on iPads and view contact details, transactions history, lifetime spending statistics, comments about the Burberry brand on social media and recommendations based on previous purchases.

This approach helps Burberry access customers’ history from all channels at once, and empowers the sales force to better serve shoppers according to their preferences – something that banks could do at the branch.

• Omnichannel Distribution. Many leading retailers are highly adept at “omnichannel distribution” – offering all products and services online, and enabling seamless channel cooperation. Customers can, for instance, easily initiate a purchase online and complete it offline. UK grocery giant Tesco makes all channels “service and sales” channels. Its first virtual store - in a subway station in South Korea – gives busy commuters the opportunity to do grocery shopping at a virtual wall. Products are displayed on screens spread across high-traffic locations in exactly the same way as in an actual store. Customers shop by scanning the barcode or QR code with their smartphones on the virtual digital display. Products then automatically land in an online cart and the completed order is delivered to the customer’s home.

Banks must develop the same omnichannel capability to retain customers, particularly with regard to branch networks. Beyond the branch, banks should explore how to make retail banking services available to customers anywhere, without the need for physical stores.

Customers are up for grabs these days. Developing a retailing mindset will enable banks to attract new customers and keep their existing ones satisfied.

re: To Bolster Customer Engagement, Take a Page from Retailers’ Playbook

Interesting to see this piece a year or so after I wrote on the subject for both Bank Systems & Technology and Insurance & Technology. The long and short of it, though, is that financial institutions have no choice but to try to emulate retailers, as that experience is the new standard for conducting business regardless of the product. Big data and instant distribution makes it easy to commoditize simple-ish products like bank accounts and auto insurance Gă÷ but customers expect that kind of experience for all financial products.

re: To Bolster Customer Engagement, Take a Page from Retailers’ Playbook

These are excellent points for all bankers to consider. It often comes down to: Put the customer first, at the center of the business. Difficult for banks because of the historical product centric and product system focus. IF, it was easy banks would have already done it because the 360 degree view of the customer has been talked about for over 15 years. With the inclusion of social media, getting a 360 degree view is only getting more difficult, so it is time to do it. But, remember, all the understanding of the customer does not earn a penny, until the bank executes against that learning. So systems of engagement to execute on customer analytics is equally important.